Q. Tell us about yourself and your firm?
A. I have been in the insurance industry for 8 years and started Promise Insurance Agency in 2004. Promise Insurance (www.PromiseInsurance.com) is an independent insurance agency located in downtown Chicago, just north of the Loop.
We primarily serve northern Illinois and the greater Chicago area. We are also licensed in Wisconsin. The two primary companies we represent are Erie Insurance (www.Erieinsurance.com) and Mercury Insurance (www.MercuryInsurance.com). Both companies are rated A+ by AM Best, which is a reflection of their financial stability.
Q. What are the various types of insurance your offer?
A. We offer personal insurance products such as home, auto, life, health and long term care insurance and then, we also provide liability and worker’ s compensation insurance to businesses.
Q. How long do you take to process a claim?
A. The claims process begins as soon as you call us to report a claim. From that point a claims adjuster is typically able to contact the insured within 24 to 48 hours.
Q. How can a person tell if the amount of insurance carried on his/her house is adequate?
A. The best way to be assured that you are carrying enough insurance on your home is to get a homeowner’ s insurance policy, with 100% guaranteed dwelling replacement cost coverage. There are a few insurance companies that offer this guarantee.
This guarantee means that if the home burns to the ground, then the insurance company will pay whatever the cost to rebuild it. There is no cap on what they will pay, it is simply guaranteed.
If you do not have a policy with 100% guaranteed replacement cost coverage on the dwelling, then to be confident in the dwelling amount you should speak to an insurance agent. Most insurance companies have a home cost estimating software program, that they can go through with you over the phone, that would provide an estimate of the dwelling value.
Your home should be insured for close to this amount. In addition to this, most insurance companies provide dwelling extension coverage. This is an amount which they would pay over and above the dwelling coverage. This amount should also be listed on your homeowner’ s insurance declarations page, which lists the coverage amounts.
Q. What is the difference between the replacement cost and the actual cash value of a property?
A. Replacement cost is the better coverage. If you have replacement cost coverage then the insurance company will pay to replace the damaged or destroyed property with a new item. If you have actual cash value, then the insurance company will take into account the depreciation of the item.
The replacement cost is what it would cost to purchase the item new. The actual cash value of an item roughly equates to what someone would pay for the item at a rummage sale.
Q. What is the difference between comprehensive and collision coverage?
A. If you have comprehensive coverage on your auto insurance policy, then this covers damage to your car for “ acts of God” or other kinds of occurrences, which are not caused by a collision. Comprehensive coverage can cover damage to your car for such things as a rock hitting the windshield, a tree falling on your car or if your car is stolen.
Collision coverage covers damage to your car when you cause a collision. If you hit a tree or another car and cause damage to your car in this manner, then the damage to your car would be covered by your collision coverage.
Q. How does a person’ s driving record affect his/her insurance premium?
A. A person’ s driving record directly affects his/her insurance rate and premium. In the state of Illinois insurance companies can look at a person’ s driving record going back 5 years. Some insurance companies choose to only look at the last 3 years.
If you have had a recent ticket or at-fault accident, then it is probably not the best time to shop your auto insurance. On the other hand, if you had an at-fault accident that just became 3 years old, then now may be a good time to get auto insurance quotes.
Q. What are the traditional types of life insurance policies?
A. There are 2 main types of life insurance, permanent life insurance and term life insurance. Permanent life insurance is designed to remain in force during the insured’ s entire lifetime. Permanent life insurance is more expensive, but it also builds up a cash value.
Term life insurance provides a fixed amount of coverage for a certain period of time - typically 10, 20 or 30 years. Term insurance is less expensive than whole life insurance, but it does not have any cash value and it expires at the end of the set term.
Q. What is the connection between risk and life insurance?
A. Most life insurance companies have several rate classifications, which directly affect the rate. Based on a person’ s weight, occupation, cholesterol, family history and other medical conditions life insurance companies place you into one of several rate classifications. This rate classification directly affects the life insurance premium.
The best example of this is the different life insurance rates between a smoker and a non-smoker. If all things remain equal then a non-smoker will receive a much better rate than a smoker.
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